Delek units bonds oversubscribed


Demand for the Leviathan partners bonds was NIS 3.3 billion as Avner and Delek Drilling seek to raise the offering by NIS 2 billion.

There was high demand last night of NIS 3.3 billion for the bond issue of Delek Group Ltd. (TASE: DLEKG) energy exploration and production units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L). Sources inform "Globes" that the partnerships have asked ratings agency Midroog to confirm a rating for increasing the size of the bond raising. The partnerships want to raise an additional NIS 2 billion. Due to the high demand, the partnerships will only raise dollar series 4.5% interest bonds and will not offer shekel bonds at all. The main consideration in the decision is because revenue for the partnerships is specified in dollars and so the rationale is to avoid costs and reduce exposure to currency fluctuations. It thus makes more sense to have the debt in dollars too.

The A series bonds are being offered that will be payable by December 2021 by which time the companies would have reduced their holding in the Tamar gas field from 39.7% to 32%. The partners own 49.34% of the giant Leviathan gas field and need financing for the first stage of development, having also already agreed a $1.50-1.75 billion loan from HSBC and JP Morgan.

Tomorrow shareholders will vote on the merger of Avner and Delek Drilling.

The bond offering was led by Leader Underwriting and Discount Underwriting.

In the bond offering, Avner and Delek Drilling were represented by Advs. Ran Shalom, Uri Rosenberg and Yaara Schori-Ben Harush of the Agmon & Co Rosenberg Hacohen & Co. law firm.

Published by Globes [online], Israel business news - - on December 22, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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